Moody's: Telemig, Amazonia Ratings on Review for Upgrade

US ratings agency Moody's Investors Service has decided to review for a possible upgrade the rating of US$120mn senior unsecured notes issued by Brazilian sister mobile phone companies Telemig Celular and Tele Norte Celular Participações (Amazônia Celular), Moody's said in a statement.

The decision marks a change from Moody's review for possible downgrade from the current B2 foreign currency rating announced before the news on August 2 that Vivo Participações was going to buy control of Telemig and Amazônia.

The transaction is subject to the approvals of regulators and shareholders though Moody's believes both regulatory and shareholder approvals should not face major obstacles.

The review reflects the expected benefits of being part of Vivo, the largest Brazilian mobile network with a significantly stronger credit profile, according to Moody's analyst Soummo Mukherjee.

Amazônia Celular's operations should benefit from better purchasing power of handsets and network equipment for instance, and fiscal and operating synergies for the combined entity, Mukherjee added.

The review also considers Amazônia Celular would receive support from Telemig should it experience difficulty in making debt servicing payments, the statement said.

Telemig operates in Minas Gerais state, while Amazônia Celular operates in the Maranhão, Pará and Amazonas states in the northeast of the country.

Posted to the site on 9th August 2007